Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion and analysis of our company's financial condition and
results of operations should be read in conjunction with our unaudited condensed
consolidated financial statements and the related notes included elsewhere in
this report. This discussion contains forward-looking statements that involve
risks and uncertainties. Actual results and the timing of selected events could
differ materially from those anticipated in these forward-looking statements as
a result of various factors.

Overview

We are a shipping agency service provider for ships coming to and departing from
Chinese ports. Our company was incorporated in New York in February 2001. On
September 18, 2007, we amended the Articles of Incorporation and Bylaws of our
New York corporation to merge into a new Virginia corporation, Sino-Global
Shipping America, Ltd.

Our principal geographic market is in the People's Republic of China ("PRC"). As
PRC laws and regulations restrict foreign ownership of shipping agency service
businesses, we operate our business in the PRC through Sino-Global Shipping
Agency, Ltd. ("Sino-China"), a PRC limited liability company wholly owned by our
founder and Chief Executive Officer, Cao Lei, and Chief Financial Officer, Zhang
Mingwei, both of whom are PRC citizens. Sino-China holds the licenses and
permits necessary to provide shipping services in the PRC. Headquartered in
Beijing with branches in Qingdao, Qinhuangdao and Fangchenggang, we provide
general shipping agency services in all commercial ports in China.

Trans Pacific Beijing and Sino-China do not have a parent-subsidiary
relationship. Trans Pacific Beijing has contractual arrangements with Sino-China
and its shareholders that enable the Company to substantially control
Sino-China.

For the purpose of building up an international shipping agency service network,
we formed a wholly-owned subsidiary, Sino-Global Shipping Australia Pty Ltd.
("Sino-Global AUS") in Perth, Australia on July 3, 2008, which serves the needs
of customers shipping into and out of Western Australia. The Company also signed
an agreement with Monson Agencies Australia ("Monson"), one of the largest
shipping agency service providers in Australia. Through the Company's
relationship with Monson, the Company is able to provide general shipping agency
services to all ports in Australia.

We established another wholly-owned subsidiary, Sino-Global Shipping (HK)
Limited ("Sino-Global HK") on September 22, 2008. Sino-Global HK is our control
and management center for southern Chinese ports and enables our company to
extend its offering of comprehensive shipping agency services to vessels going
to and from one of the world's busiest ports. On July 27, 2009, Sino-Global HK
signed an exclusive partnership agreement with Forbes & Company Limited
("Forbes"), which is a listed company on the Bombay Stock Exchange (BOM: 502865)
and one of the largest shipping and logistic service providers in India. Through
our relationship with Forbes, we are able to provide general shipping agency
services to all ports in India.

The Company established a new wholly-owned subsidiary, Sino-Global Shipping
Canada Inc. (Sino-Global Canada) at the end of 2012, to provide services for
ships loading commodities at Canadian ports. Sino-Global Canada has already
commenced to provide services to Baosteel's vessels in Canada.

On July 5, 2011, Sino-China signed a Strategic Cooperative Agreement with COSCO
Container Shipping Agency Co. Limited, one of the largest state-owned shipping
agents in China. The Agreement entitles us to use COSCO Container Shipping
Agency's name to market business in China and overseas. In addition, we are able
to provide shipping agency services through over 50 COSCO's offices in China.

Revenues

China's economy slowed down in 2012 resulting in reduced volume of iron ore
import. Although the number of ships we served increased from 222 to 223 for the
six months, it decreased from 116 to 99 for three months ended December 31, 2011
and 2012. Of the total number of ships we served, the number of ships we
provided loading/discharging services were significantly decreased. By contrast,
our strategic partner, Monson Australia, referred an increased number of ships
to us for which we provided protective services. As protective services generate
much less agency revenue per ship, our total revenues decreased from $16.62
million down to $14.31 million for the six months and from $8.02 million down to
$6.43 million for the three months ended December 31, 2011 and 2012,
respectively.

We recognized more than 99% of our revenues in our locations in the United
States, Australia and Hong Kong. The revenues recorded in Sino-China are subject
to a 5% business tax as well as an additional 0.5% surcharge after deducting the
costs of services. We deduct these business taxes and related surcharges from
our gross revenues to arrive at our total revenues.

The Chinese Ministry of Finance and the State Administration of Taxation jointly
set out the Value Added Tax (VAT) reform plan, which will see the business taxes
replaced by VAT commencing from Shanghai on January 1, 2012, and then be
extended to all other provinces and autonomies in mainland China. As we recorded
most of our revenues outside of China, there is little effect of ongoing VAT
reform to our operating results.

We charge shipping agency fees in two ways: (1) the fixed fees are predetermined
with a customer, and (2) the cost-plus fees are calculated based on the actual
costs incurred plus a mark up. We generally require payments in advance from
customers and bill them the balances within 30 days after the transactions are
completed.

We believe the most significant factors that directly or indirectly affect our
shipping agency service revenues are:

¨ the number of ships to which we provide port loading/discharging services;

¨ the size and types of ships we serve;

¨ the type of services we provide, for example loading/discharging, protective,
owner's affairs and so on;

¨ the rate of service fees we charge;

¨ the number of ports at which we provide services; and

¨ the number of customers we serve.

Historically, our services have primarily been driven by the increase in the
number of ships and customers, provided that the rate of service fees is
determined by market competition. We believe that an increase in the number of
ports served generally leads to an increase in the number of ships and
customers. We expect that we will continue to earn a substantial majority of our
revenues from our shipping agency services. As a result, we plan to continue to
focus most of our resources on expanding our business to cover more ports in the
PRC and overseas. In addition, we will allocate our resources in marketing our
brand to customers, including ship owners and charters, which transport goods
from all ports around the world to China. We believe that our diversified focus
on loading and discharging cargo in both Chinese and overseas ports will enable
us to continue growing quickly and also place us in a better position to manage
the exchange rate risk associated with the trend of the U.S. dollar's
devaluation against the RMB because our overseas revenues and port charges are
normally paid in foreign currencies. To the extent these other foreign
currencies devalue against the RMB, of course, we would still face exchange rate
risks.

Operating Costs and Expenses

Our operating costs and expenses consist of costs of revenues, general and
administrative expenses, selling expenses. Our total operating costs and
expenses decreased in absolute amount and as a percentage of total revenues for
the six and three months ended December 31, 2012 compared to the same periods
ended December 31, 2011 mainly due to our budget control efforts on general and
administrative expenses. The following table sets forth the components of our
Company's costs and expenses for the periods indicated.

Costs of Revenues. Costs of revenues represent the expenses incurred in the
periods when a ship docks in a harbor to load and discharge cargo. We believe
the most significant factors that directly or indirectly affect our costs of
revenues are:

¨ the number of ships to which we provide port loading/discharging services;

¨ the size of ships we serve, as large ship requires more towboats to park at
harbor;

¨ the nationality of ships we serve, as a foreign ship pays different tonnage
taxes;

¨ the complexity of service processing;

¨ the operating condition of a particular port for ships loading or discharging;

¨ the number of days a ship loading or discharging; and

¨ the number of days ships loading or discharging during overtime period and
public holidays.

We typically pay the costs of revenues on behalf of our customers. Except for
Australia and Canada where our revenues and costs are settled in the local
currencies, we receive most revenues from our clients in U.S. dollars and pay
most costs of revenues to the local port agents in local currency, for example
RMB in China. As such, the costs of revenues will change if the foreign currency
exchange rates change.

Our costs of revenues as a percentage of our total revenues increased slightly
from 91.52% to 91.70% for the six months and from 92.89% to 93.41% for the three
months ended December 31, 2012 and 2011, respectively. The increase was due
primarily to the devaluation of the U.S. dollars against Chinese RMB by 1.34%
and 1.67% for the six and three months ended December 31, 2012 and 2011,
respectively. Because the U.S. government imposed a third round of quantitative
easing (QE3), we expect that the U.S. dollar's devaluation against the Chinese
RMB will continue in fiscal 2013. Consequently, we expect that our costs of
revenues as a percentage of our total revenues will continue to increase and our
gross margin will continue to decrease.

General and Administrative Expenses. Our general and administrative expenses
primarily consist of salaries and benefits for our staff (both operating and
administrative personnel), business promotion, depreciation expenses, office
rental expenses and expenses for legal, accounting and other professional
services. For the six and three months ended December 31, 2012, our general and
administrative expenses as a percentage of our total revenues decreased from
17.01% to 14.01% and from 18.01% to 15.68% over the same periods in 2011, mainly
due to our expense cuts in business expansion, office expenditures and travel
expenses. In particular, the general and administrative expenses of our
Australian and Hong Kong offices constituted about 8.89% of our total general
and administrative expenses for the period ended December 31, 2012, compared to
that of 10.33% for the period ended December 31, 2011.

Selling Expenses. Our selling expenses primarily consist of commissions and
traveling expenses for our operating staff to the ports at which we provide
services. In line with the decrease in our revenues, our selling expenses
decreased in absolute amount and kept same as a percentage of our total net
revenues for the six months ended December 31, 2012 Selling expenses decreased
in absolute amount and slightly increased as a percentage of our total net
revenues for the three months ended December 31, 2012.

Critical Accounting Policies

We prepare the consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America ("US GAAP"). These
accounting principles require us to make judgments, estimates and assumptions on
the reported amounts of assets and liabilities at the end of each fiscal period,
and the reported amounts of revenues and expenses during each fiscal period. We
continually evaluate these judgments and estimates based on our own historical
experience, knowledge and assessment of current business and other conditions,
our expectations regarding the future based on available information and
assumptions that we believe to be reasonable.

There have been no material changes during 2013 in the Company's significant
accounting policies to those previously disclosed in the 2012 annual report.

2013 Trends

Because our principal operating market is based in the PRC, our business
strategies are heavily influenced by the development of Chinese economy and
political environments. Since the end of 2011, the Chinese government has
exercised significant control to slow the pace of growth of the Chinese economy.
Our revenues decreased 13.86% for the six months and 19.85% for the three months
ended December 31, 2012. This is largely attributed to the reduced number of
ships we served for Beijing Shourong Forwarding Service Co., Ltd. ("Shourong"),
our major customer from which we have generated more than 60% of total revenues.
Although it is difficult for us to predict future trends given current economic
uncertainties, we still believe that growth is key for a small company like us
to survive and develop. As such, we will continue setting top line growth as our
first priority. We are trying to maintain our revenues in fiscal 2013 equal to
or slightly less than that in fiscal 2012. To fulfill the objective, we will
leverage our efforts in maintaining our current clients and attracting new
clients, particularly increasing revenues from our agency services to vessels
coming to Chinese ports as well as expanding business activities at the loading
ports in Australia, Canada, South Africa, Brazil and other countries to which
China has major trading activities..

In addition to revenue challenges, we have experienced significant difficulties
in managing our foreign exchange risks. Because we receive most of our revenues
in U.S. dollars and pay most of our expenses in Chinese RMB, we have faced
increased costs of revenues due to the devaluation of the U.S. dollar against
the RMB over the last few years. Although the U.S. dollar devaluation appears to
be slowing down, we anticipate the trend will continue in fiscal 2013 and our
gross margin will continue to be negatively affected by the devalued U.S.
dollar.

In accordance with our budget control efforts, our general and administrative
expenses decreased significantly for the six and three months ended December 31,
2012. In the 2013 fiscal year, we will continue our combined effort to control
our budget and promote business growth.

Compliance with Listing Rule 5550((b)(1)

We received a notification letter from NASDAQ dated November 21, 2012, regarding
noncompliance with the NASDAQ Capital Market Listing Rule 5550(b)(1), by virtue
of our company maintaining less than $2,500,000 in shareholders' equity. In
accordance with the instructions provided in the notification letter, we
responded to NASDAQ, applying for a full extension together with a plan to
regain compliance with Listing Rule 5550(b)(1). The application for the full
180-day extension was granted by NASDAQ on January 24, 2013, requiring us to
implement our plan and return to compliance with NASDAQ Capital Market Listing
Rule 5550(b)(1) on or before May 20, 2013.

Results of Operations

Six Months Ended December 31, 2012 Compared to Six Months Ended December 31,
2011

Revenues. Our total revenues decreased by 13.86% from $16,615,305 for the six
months ended December 31, 2011 to $14,311,829 in the comparable six months in
2012. The number of ships that generated revenues for us increased from 222 for
the six-month period of fiscal 2012 to 223 for the comparable period of fiscal
2013. Despite the increased numbers of ships we served, our revenues decreased.
This is because we provided protective services for more ships, which generated
significantly lower revenues per ship. For the six months ended December 31,
2012, we provided protective services to 91 ships, compared to 33 ships for the
2011 six month period. In contrast, we provided loading/discharging service to
132 and 189 ships for the six months ended December 31, 2012 and 2011,
respectively.

Total Operating Costs and Expenses. Our total operating costs and expenses
decreased by 16.08% from $18,246,114 for the six months ended December 31, 2011
to $15,312,263 for the six months ended December 31, 2012. This decrease was
primarily due to decreases in our costs of revenues and general and
administrative expenses, as discussed below.

Ÿ Costs of Revenues. Our cost of revenues decreased by 13.69% from
$15,206,693 for the six months ended December 31, 2011 to $13,124,226
for the six months ended December 31, 2012. The revenues decreased more
quickly than costs of revenues and the gross margins decreased from
8.48% down to 8.30% for the comparative six months ended December 31,
2011 and 2012, respectively. The 0.11% decrease in gross margin was
largely due to the devaluation of the U.S. dollar against the Chinese
RMB. The average foreign exchange rate was $1.00 to RMB6.3009 for the
six months ended December 31, 2012 compared to $1.00 to RMB6.3865 for
the six months ended December 31, 2011, a 1.34% increase during the
period.

Ÿ General and Administrative Expenses. Our general and administrative
expenses decreased by 29.08% from $2,826,615 for the six months ended
December 31, 2011 to $2,004,611 for the six months ended December 31,
2012. This mainly due to (1) decreased bad debts provision of
$67,827,(2) a decrease of $409,140 in business promotion, (3) decreased
listing expense of $108,527, (4) decreased salaries and benefits for
our staff of $40,656. We will continue our budget control efforts to
reduce the general and administrative expenses as a percentage of total
revenues.

Ÿ Selling Expenses. Our selling expenses decreased by 13.81% from
$212,806 for the six months ended December 31, 2011 to $183,426 for the
period ended December 31, 2012. Most selling expenses are commissions
paid to business partners who refer shipping agency business to us.

Operating Loss. We had an operating loss of $1,000,434 for the six months ended
December 31, 2012, compared to operating loss of $1,630,809 for the comparable
six months in 2011. The operating loss for the six-month period of fiscal 2013
was decreased primarily due to the reduced general and administrative expenses.

Financial Income, Net. Our net financial income was $29,734 for the six months
ended December 31, 2012, compared to our net financial income of $100,857 for
the six months ended December 31, 2011. The net financial income was derived
largely from the foreign exchange income recognized in the financial statement
consolidation. Foreign exchange losses resulting from the settlement of foreign
exchange transactions are recognized in the condensed consolidated statements of
operations.

Taxation. Our income tax expense was $79,100 for the six months ended December
31, 2012, compared to income tax benefits of $24,121 for the six months ended
December 31, 2011. As we made a tax provision of $24,100 and deferred tax
provision of $55,000, the income tax expense of the six month period ended
December 31, 2012 was $79,100.

Net Loss. As a result of the foregoing, we had a net loss of $1,008,011 for the
six months ended December 31, 2012, compared to net loss of $1,654,325 for the
six months ended December 31, 2011. After deduction of non-controlling interest
in loss, net loss attributable to Sino-Global Shipping America, Ltd. was
$481,819 for the six months ended December 31, 2012, compared to net loss of
$1,060,788 for the six months ended December 31, 2011. With other comprehensive
loss foreign currency translation, comprehensive loss was $484,267 for the six
months ended December 31, 2012, compared to comprehensive loss of $1,048,982 for
the six months ended December 31, 2011.

Three Months Ended December 31, 2012 Compared to Three Months Ended December 31,
2011

Revenues. Our total revenues decreased by 19.85% from $8,022,598 for the three
months ended December 31, 2011 to $6,429,761 in the comparable three months in
2012. The number of ships that generated revenues for us decreased from 116 for
the three months ended December 31, 2011 to 99 for the comparable quarter of
fiscal 2013. Accordingly, our revenues decreased. In addition, we provided
protective services for more ships which generated significantly lower revenues
per ship. For the three months ended December 31, 2012, we provided protective
services to 40 ships, compared to 23 ships for the same quarter of 2011. We
provided loading/discharging service to 59 and 93 ships for the three months
ended December 31, 2012 and 2011, respectively.

Total Operating Costs and Expenses. Our total operating costs and expenses
decreased by 21.03% from $9,005,401 for the three months ended December 31, 2011
to $7,111,319 for the three months ended December 31, 2012. This decrease was
primarily due to decreases in our costs of revenues and general and
administrative expenses, as discussed below.

Ÿ Costs of Revenues. Our cost of revenues decreased by 19.41% from
$7,452,475 for the three months ended December 31, 2011 to $6,006,063
for the three months ended December 31, 2012. The revenues decreased
faster than costs of revenues, and the gross margins decreased from
7.11% down to 6.59% for the comparative three months ended December 31,
2011 and 2012, respectively. The 0.11% decrease in gross margin was
largely due to the devaluation of the U.S. dollar against the Chinese
currency. The average foreign exchange rate was $1.00 to RMB6.2494 for
the three months ended December 31, 2012 compared to $1.00 to RMB6.3524
for the three months ended December 31, 2011, a 1.67% increase during
the period.

Ÿ General and Administrative Expenses. Our general and administrative
expenses decreased by 30.20% from $1,444,702 for the three months ended
December 31, 2011 to $1,008,338 for the three months ended December 31,
2012. This decrease was mainly due to (1) decreased salaries and
benefits for our staff of $48,845, (2) a decrease of $137,178 in
business promotion, (3) decreased listing expense of $94,271. We will
continue our budget control efforts to reduce the general and
administrative expenses as a percentage of total revenues.

Ÿ Selling Expenses. Our selling expenses decreased by 10.45% from
$108,224 for the three months ended December 31, 2011 to $96,918 for
the three months ended December 31, 2012, mainly due to lower
commission payments related to the sales decrease.

Operating Loss. We had an operating loss of $681,558 for the three months ended
December 31, 2012, compared to operating loss of $982,803 for the comparable
three months in 2011. The operating loss for the second quarter of fiscal 2012
was primarily due to the decrease in costs of revenues and general and
administrative expenses.

Financial Income, Net. Our net financial income was $32,302 for the three months
ended December 31, 2012, compared to our net financial income of $144,860 for
the three months ended December 31, 2011. The net financial income was derived
largely from the foreign exchange gains recognized in the financial statement
consolidation. Foreign exchange losses resulting from the settlement of foreign
exchange transactions are recognized in the condensed consolidated statements of
operations.

Taxation. Our income tax benefits were $78,100 for the three months ended
December 31, 2012, compared to income tax benefits of $1,000 for the three
months ended December 31, 2011.As we provided for tax benefits of $100 and
deferred tax benefits of $78,000, the income tax benefits of the three months
ended December 31, 2012 was $78,100.

Net Loss. As a result of the foregoing, we had a net loss of $565,854 for the
three months ended December 31, 2012, compared to net loss of $827,385 for the
three months ended December 31, 2011. After deduction of non-controlling
interest in loss, net loss attributable to Sino-Global Shipping America, Ltd.
was $291,586 for the three months ended December 31, 2012, compared to net loss
of $395,001 for the three months ended December 31, 2011. With other
comprehensive loss foreign currency translation, comprehensive loss was $285,251
for the three months ended December 31, 2012, compared to comprehensive loss of
$423,625 for the three months ended December 31, 2011.

Liquidity and Capital Resources

Cash Flows and Working Capital

We have financed our operations primarily through cash flows from operations. As
of December 31, 2012, we had $885,806 in cash and cash equivalents. Our cash and
cash equivalents primarily consist of cash on hand and cash in banks. We
deposited approximately 91.53% of our cash in banks in the USA, Australia and
Hong Kong.

The following table sets forth a summary of our cash flows for the periods
indicated: